President-elect Obama will shred the Bush administration's energy policies and introduce a major climate change bill in an attempt to bring the US back into the international environment fold according to his senior advisers.

He is also expected to announce a goal of reducing US greenhouse gas emissions to 1990 levels by 2020 and then cutting them by 80% by 2050. This will be via a cap-and-trade system with carbon permits auctioned off to industries to encourage them to reduce emissions.

The election result was greeted ecstatically by US environment groups. Rodger Schlickeisen, the president of the Defenders of Wildlife Action Fund, said: "For the first time in nearly a decade, we can look to the future with a sense of hope that the enormous environmental challenges we face will begin to be addressed and that our air, land, water, and wildlife – and the overall health of our planet – will not be sacrificed to appease polluting industries and campaign contributors.

"It is difficult to describe the damage done by the Bush administration's misguided and destructive environmental policies. For eight years, the special interests have ruled, virtually dictating our conservation, environmental and energy policies."

European environment groups also welcomed what they hoped would be a radical new direction for US environmental policy. "Obama's victory will give crucial climate negotiations a much greater chance of success – the United States must face up to its international responsibilities and show positive global leadership in low-carbon economic development", said Andy Atkins, Friends of the Earth's executive director in London.

According to his manifesto, Obama climate change plans will be linked to a $175bn (£109bn) economic-stimulus package intended to revamp the US energy economy and kickstart new US environmental policy by creating five million new "green" jobs.

"That's going to be my number one priority when I get into office," Obama said of his "green recovery" plans shortly before his election. "A clean-energy economy can be the engine that drives us into the future in the same way the computer was the engine for economic growth over the last couple of decades."

Federal support will now be given to car companies to design fuel-efficient cars, a "green jobs corps" for unemployed youth will be set up to improve energy conservation in homes and community buildings, and science and research funding for clean energy will be doubled. In addition, consumers could get tax credits if they buy green cars or make homes energy efficient.

"He will put forward an energy bill ahead of a climate bill," said Kateri Callahan, president of the Alliance to Save Energy, an energy advocacy group in Washington that represents some of America's largest companies, including Areva and Dow Chemicals.

Renewables, including hydroelectricity from dams, generate 8% of US electricity now and Obama has said he wants 10% of electricity to come from them by 2012 and 25% by 2025. This still falls short of Europe where the plan is for renewables to generate 20% of all energy, including electricity, by 2020.

However, the global financial crisis could undermine many of his plans, some analysts have warned, with many clean technology companies expected to go out of business in the next 18 months.

Other analysts warned today that Obama could leave the UK trailing in the race to capitalise on the huge new opportunities for environmental technologies. Adrian Wilkes, chair of the Environmental Industries Commission said: "Obama has set out a comprehensive set of policies to support the US in the transition to a low-carbon and resource-efficient economy. This is a warning to Gordon Brown and Peter Mandelson that the UK risks falling behind in the race to develop the technologies of the future".

The environment was a clear winner in Congressional races, with seven of the 12 congressmen known as the "Dirty Dozen" lawmakers – who have consistently voted against clean energy and conservation – failing to keep their seats, ".

"The Dirty Dozen represent the biggest roadblocks in Congress on the road to America's clean energy future," said League of Conservation Voters' president, Gene Karpinski. "Siding with the oil industry at every turn, they have consistently voted against policies that would create jobs, ensure our national security, and guarantee a sustainable future for our country."